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Siberian temperatures that have gripped Poland over the last week has sent natural gas usage soaring as consumers and businesses crank up heating system to keep warm – but the spike in consumption is not causing much joy at the country’s main gas provider.

That’s because PGNiG, the government controlled gas delivery monopoly, is paying higher prices for the gas it imports from Russia than it is able to charge its customers – pending a request with regulators to increase gas rates.

Today, the gas company cut supplies to big industrial users like refiner PKN Orlen and chemical companies ZCH Police and Pulawy – normal procedures when demand soars.

Russia’s Gazprom on Tuesday reduced exports to western Europe due to the cold snap, reported Reuters.

Poland is Gazprom’s third largest client – after Germany and Italy – taking about 10 bcm of gas a year. Although the price that Poland pays is not public, it is thought to be about $500 per 1,000 cubic metres, at least 10 per cent more than customers in western Europe.

However, PGNiG cannot quickly increase prices to compensate. It has been lobbying Poland’s energy regulator for a price hike since October – but even if there were an agreement to allow for a rate increase, it would take several weeks to implement.

As a result, Poland’s Rzeczpospolita newspaper estimates that PGNiG faces a two-week loss of about 150m zlotys ($47m).

“It is certain that PGNiG will end the first quarter of this year with a loss,” Marcin Palenik, an analyst with the DM Millennium brokerage, tells the paper.

PGNiG is also being hit by Poland’s weak zloty as it pays for gas in dollars, but is able to charge customers only in zlotys. PGNiG’s shares were down by 0.77 per cent at 3.86 zlotys in trading on the Warsaw Stock Exchange this afternoon.

While the gas company is feeling the pinch, not everyone is upset over the arrival of winter temperatures.

Until now Poland, like most of the rest of Europe, was basking in unseasonably warm temperatures. That had meant big savings for city governments, which have seen their snow removal and road salting costs plummet. In Warsaw, the city had spent 12m zlotys up to January 16 compared to 55m zlotys in the same period last year.

However, the dropping temperatures have sent the salting trucks onto the streets, which should allow the companies with city contracts to make up for a poor start to the season.

Related reading:
Poland’s PGNiG signs deal with Gazprom, FT
Poland: privatisating with one hand, buying state assets with the other, FT